Minimum wage increased

The minimum wage and annual holiday entitlement were both raised today, meaning an increased pay packet and more days off for millions of UK workers.

The rate for the statutory minimum wage will go up 17p to £5.52 for adult workers, and by 16p to £4.60 for 18 to 21-year-olds.

The rate for 16 and 17-year-olds will also rise from £3.30 to £3.40 an hour.

Meanwhile, fulltime workers will be entitled to an extra four days holiday, with annual leave entitlement going up to 24 days a year. The figure will increase again to 28 days in April next year.

Employment relations minister Pat McFadden said up to six million workers will benefit from the extra holidays and just over a million will have a higher wage.

"These changes will improve the lives of millions of British workers, giving them more time with their families and ensuring our lowest paid workers continue to be able to earn a living wage," said Mr McFadden.

Unions welcomed the changes but retail groups were more cautious, highlighting the cost of previous minimum wage rises to business.

The British Retail Consortium (BRC) claimed last year's wage rise had cost retailers £1.7bn. As well as compensating employees on the minimum wage, the consortium said businesses were forced to pay out to members of staff on higher salaries in order to maintain wage differentials.

BRC director general Kevin Hawkins said: "Future increases should be guided much more closely by increases in median earnings in sectors, including retail, which are most affected by the minimum wage."

However, TUC general secretary Brendan Barber said: "Today's minimum wage increase will provide a much-needed boost to the pay packets of millions of low paid workers.

"Unions would have liked a bigger increase but at this level there is nothing for businesses to complain about."

Last week, youth organisations criticised the tiered minimum wage system, claiming it was an example of age discrimination.

The British Youth Council sent letters of protest to the Low Pay Commission calling for an equal minimum wage rate for everyone aged 16 and over.